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Pharma distribution chains trip over hurdles to logistics

Though retailing of drugs has improved in major metros such as Delhi, Mumbai and Bengaluru, pharmacy firms in Hyderabad are facing issues delivering medicines due to lack of government passes.  (Photo: Pradeep Gaur/Mint)Premium
Though retailing of drugs has improved in major metros such as Delhi, Mumbai and Bengaluru, pharmacy firms in Hyderabad are facing issues delivering medicines due to lack of government passes. (Photo: Pradeep Gaur/Mint)

  • Chemists worry that disruption may worsen as local authorities hamper shipments
  • Shipments from factories affected as staff is either not turning up or being stopped by police

NEW DELHI : Retailing of medicines improved in major metros such as Delhi, Mumbai and Bengaluru on the second day of a 21-day nationwide lockdown to curb the spread of Covid-19.

Manufacturers and pharmacists, however, say the situation may worsen as they continue to face hurdles from authorities in making deliveries.

“There is a problem faced in logistics for transport of shipments from factories to C&F (clearing and forwarding) agents because the staff are either not coming to work or if they do, they are being stopped by the police," said an official with a large manufacturer, requesting anonymity.

Another official with a chemists and druggists body in south India confirmed the issue, saying it could potentially cause a problem if not rectified.

Meanwhile, online pharmacy firms are especially facing troubles in delivering medicines in Hyderabad due to lack of government passes.

“Operations have resumed today in almost all our cities. It is not normal but moving towards it. Only Hyderabad is a problem," said Prashant Tandon, founder and chief executive of 1mg, an e-pharmacy firm. On Wednesday, 1mg had to pause operations due to problems with local authorities and fear among delivery staff, Tandon said over the phone.

“Right now, the government is really doing a commendable job, but there are still a few things left out. For example, they should look at how they can cut queue and quicken the process of issuing passes that allow essential services delivery to carry on," said Yogesh Shukla, director of e-pharmacy firm MedLife, over the phone.

Shukla said there is also a need to motivate last-mile delivery personnel by giving them assurances that they won’t be stopped.

While delivery and cargo shipment staff were facing hurdles earlier this week amid the lockdown, the troubles worsened after Prime Minister Narendra Modi announced the stricter three-week lockdown.

The government, through a notification, said that it will allow essential services to resume, but officials in the pharmaceutical industry say local authorities, especially those on the ground, seemed less aware of it.

The supply disruption caused by the novel coronavirus infection, or Covid-19, is seen particularly affecting pharmaceutical firms, especially as they face a double whammy from their dependence on China, the epicentre of the disease, for supply of raw materials.

While factories manufacturing active pharmaceutical ingredients have mostly reopened in China, companies there continue to face logistical issues.

An executive with a large multinational drug maker said if the supply problems continue beyond April, there may be a shortage of drugs like antibiotics and vitamins in India. This issue could further be exacerbated if the delivery of shipments from Indian formulation factories is not improved, added the executive, requesting anonymity.

India Ratings and Research has said that profitability of pharma companies could be hit if the crisis continues for another three months. “With respect to the Covid-19 issue, however, if the outbreak is not contained over the next three months, the extent of disruption in supply is likely to be far greater than that in FY17, resulting in pressures on cash flows of pharma-formulations players," said the credit rating agency in a report earlier this month.

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